COLUMN-Spring cleaning for your portfolio

(The author is a Reuters columnist and the opinions expressedare his own. For more from John Wasik see http://link.reuters.com/syk97s)

By John Wasik

CHICAGO, April 29 (Reuters) - Whether you need to invest atax refund or simply want to see if you're on track with yourinvestments, spring is a great time to get out the broom.

I needed to make a large contribution to my 401(k) to offsetsome taxes recently, so I took the opportunity to see that myportfolio is meeting my objectives.

In my case, I needed to do some rebalancing and checkreturns of the funds I owned against benchmarks. Then I checkedto see if my funds tracked my long-term investment policy.

When I first opened my 401(k) about a decade ago, my mainobjective was broad-based global income and growth. Then I addeda little gold for inflation protection last year. Now I'vedrifted off course, so it's time to ask some questions.

GLOBAL GROWTH

In my global search for a combination of income andappreciation, I need more exposure to natural resources, thestaple commodities of developing countries.

When I check the International Monetary Fund forecasts, Isee that the "advanced country" sector, which includes theUnited States, Canada, Japan and Europe, is only expected togrow 1.4 percent this year and 2.2 percent next year. Thatprobably won't beat the rate of U.S. inflation, so I also wantto add more "emerging and developing" countries from Asia,Africa, Eastern Europe and South America. This group is forecastto grow from 5.5 percent to 6 percent over the next two years,barring a worldwide downturn.

After reviewing my portfolio, I see that I need growth fromunderdeveloped countries and lower volatility companies thatbenefit from global commodity demand. So I'm considering addingthe IQ Global Resources ETF (GRES), which holds energy, miningand food companies; and the iShares Frontier Markets ETF (FM),which holds stocks from countries like Kuwait and Vietnam. Eachfund would make up 10 percent of my portfolio.

CHANGES NEEDED

Not only do I need to rebalance my holdings to about 10percent per fund and add the two new funds, I need to make somesubstitutions to find better-performing, lower-cost funds.Here's a thumbnail review of what I own:

-iShares Core Total US Bond Market ETF (AGG) - This has beenmy all-in-one U.S. bond market fund. I'll keep the allocationbecause it's a cheap way to own a big slice of the U.S. bondmarket, even though it's been my second-weakest performer with a7 percent return over a decade.

-American Century International Bond Fund (BEGBX) - A globalbond fund that invests in high-quality corporate and governmentsecurities. It has not been beating its peers over the pastthree to five years. It's rated "1" and "2" in its LipperLeaders rating (Lipper is owned by Thomson Reuters), the lowestmarks on a scale of 1 to 5. I'm looking for some substitutes.

-Fidelity New Markets Income (FNMIX) - An emerging marketsbond fund rated an overall "5" by Lipper. This has been my bestperformer, returning an annualized 11 percent over the past 10years through April 26. Its portfolio is invested in 80 percentemerging markets bonds, which gives me a hedge against U.S.bonds and the dollar. Because the dollar amount of the fund hasgrown to nearly 20 percent of my portfolio, though, I'm going tosell some shares to get back to a 10 percent stake.

-Fidelity Capital & Income (FAGIX) - This corporate junkbond fund is the riskiest of all of my bond funds, but it'salmost 20 percent of my portfolio and the second-best performer.I'll sell half of it and invest the proceeds in ainflation-indexed bond fund (see below). It's rated "4" overallwith a 10 percent annualized return.

-Fidelity International Real Estate Fund (FIREX) - Ownsstocks that hold global real-estate investment trusts (REITs).This relatively new fund is not pulling its weight, onlyreturning 0.52 percent annually with a "3" Lipper ranking. I'mlooking for a better-performing substitute, so this one is onthe block.

-iShares Gold Trust (IAU) - Following the recent slide ingold, this fund is down more than 5 percent this year. Luckilyit only represents about 2 percent of my portfolio. I'm going tosell it and exchange it for a Treasury Inflation ProtectedSecurities fund like the iShares TIP ETF (TIP), which will offerless volatile inflation protection.

(Follow us @ReutersMoney or at http://www.reuters.com/finance/personal-finance Editing by Lauren Young and Steve Orlofsky)